Lawmakers are meeting at the state Capitol this afternoon for what state Rep. Stephen Ortego says will be a “very interesting meeting” to address the nearly $1 billion in Medicaid cuts coming down to Louisiana at the hands of Congress.

State Department of Health and Hospitals Secretary Bruce Greenstein is set to address members of the House Health and Welfare and Appropriations committees during a joint briefing at 2 p.m. today. He’ll likely face some tough questions about the future of health care in Louisiana following Congress’ unexpected gutting of $859 million in federal Medicaid dollars.

Greenstein revealed late Friday afternoon the administration’s plans for dealing with the billion-dollar blow, a plan that slashes $329 million from the LSU Hospital System that oversees nine publicly run charity hospitals, equating to roughly a fourth of the entire system’s budget. The Times-Picayune described the cuts as “an eyebrow-raising sum that raises the specter of reorganization, if not virtual elimination of the safety-net model as it has existed for decades:”
The total $551 million reduction comes out of an approximately $7 billion insurance program that provides health care access to 1.2 million Louisianians, most of them children. Rural nonstate hospitals will lose all of their state payments for treating the insured and the uninsured. Private and other nonstate hospitals will have their Medicaid payment rates reduced by 3.7 percent.

Greenstein suggested that the next decisions will be LSU’s, but he made it clear that the administration expects quick action. “I emphasized with Dr. Jenkins that the development of this plan will happen very quickly,” he said. He added, “I do not anticipate that hospitals will have to close to complete their plan.”

Administration officials noted that hospitals cannot be closed without legislation permitting those closures, but [Sen. Dan] Claitor envisioned a situation in which the hospitals’ budgets are cut to the bone and the Legislature is left to deliver the killing blow, providing political cover to the administration.
“I think the biggest question will be coming from the fiscal hawks who wanted to cut $230 million from DHH two months ago,” Ortego says. “[Greenstein and others in the Jindal administration] freaked out and said they’d have to shut down hospitals. Now all of a sudden we’re talking about $880 million and they’re saying we can do this. No big problem. When you do the math, there’s just no way they’ll be able to keep all those hospitals open. It’s going to be a very intersting meeting at 2 p.m.”

Ortego says the other hot topic this afternoon will likely be the $94 million Jindal still has to come up with to fill in the remainder of the Medicaid budget hole. Jindal’s plan is to pray that a budget surplus appears later this year, despite the fact that the state has for the past few years been faced with a budget that consistently falls short of econonomists’ estimates. For Jindal’s plan to work, the state would have to take in almost $100 million beyond what revenues are already projected, The Advocate reports.

“It’s like magic money,” Ortego says.

One of Ortego’s biggest legislative accomplishments as a freshman rep. was the creation of a coordinated school health and wellness model that’s currently being developed for Lafayette Parish schools under the vision of Superintendent Pat Cooper. The legislation created a formal partnership between the school system and UMC with an end goal of providing primary care services to students and their family members as a way to better academic outcomes and avoid costly emergency room visits through preventative care.

The pilot program Lafayette involves both public and private hospital resources here at home and also relies heavily on Medicaid reimbursements from the federal government. Asked if the pending cuts to the hospital system could impact the school wellness plan, Ortego says, “Of course.”

“It’s one less tool in the toolbox,” Ortego says. “If they shut down UMC, it’ll have to be all private. Right now it’s a mixture of public and prviate because we’re still seeing who’s willing to take on what. UMC was definitely a big piece of that pie. We’re going to implement it one way or the other, but we want to include UMC in that conversation mostly because of their expertise in pediatrics and them dealing with a population that’s the same population we see in the school system.”

Some lawmakers have publicly stated their support for a special legislative session to address the Medicaid mess, but with all eyes on Jindal and his national ambitions, a special session is highly unlikely.

“The craziest part is we have no control right now. We’re not in session,” Ortego says. “If we went into special session to restructure the budget, it would put those couple of billion dollars a year in tax credits on the line. Which ones do we value more than our public health and even private health? About two-thirds of patients at LSU hospitals are outpatient, which is why the system is actually so efficient. Over the years it was modeled more and more toward outpatient care, people using preventative measures. We’ve always had a safety net for health care in Louisiana, since 1736. The French started it and the Spanish continued it. We’ve always made sure people are taken care of.”

Read more on the critical health care cuts here and here.

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